Baltimore City Water Rate Increase – Flushing Your Money Down the Drain?

By Charlotte Clarke, Senior Law Clerk

Earlier this summer, the Baltimore City Department of Public Works (DPW) announced a three year plan to increase water rates by almost 33% by 2019: 9.9% on October 11, 2016, 9.9% on July 1, 2017, and 9.9% on July 1, 2018. DPW Director Rudy S. Chow announced in late August that the final quarterly water bills will arrive for city consumers in September, and the new monthly billing system will start in October.

The stated purpose of the increases is to cover the cost of various water and wastewater capital improvements, pursuant to the Director’s duty to recommend rates and charges so that water utilities are self-sustaining. On its website DPW explains that the average age of the City’s large water mains is 75 years, and renewal or replacement is required in many sections. There are also additional costs associated with the new BaltiMeters, which are promised to ensure accurate and timely meter readings and to overall be more customer-friendly.

Valid as some of these reasons may be, they all sound vaguely familiar. In July of 2013, rates went up by 15% to fund the new state of the art BaltiMeters and billing system. The increase “ensured” faster repair and replacement of aging infrastructure. In 2014 the rates increased by 11% in order to replace water mains and provide more accurate and reliable water meters, and to improve the billing system. DPW has also publicly stated that in the last 19 years they completed almost 20 miles of water main replacement and rehab.

It is hard not to wonder how the increased funding from prior increases was spent, and how it is that so much more new funding is already required. Does it really cost 33% to create a more customer friendly system? Aren’t there alternative ways to make the system more customer-friendly?

In addition to begging these questions, the new rate structure itself is also puzzling. The old rate structure applied a minimum quarterly charge set by meter size, and it was assessed until the property was formally abandoned, plus a consumption charge that is calculated by cubic feet of water use (units). DPW explained that with the new rate structure they are eliminating the quarterly minimum charge. According to the Board of Estimates Agenda for July 27, 2016, the new water bill is determined by applying a variable rate to each customer’s consumption and adding a fixed rate component. It seems like the DPW is simply replacing the terms “minimum quarterly charge” with “fixed rate component,” because essentially they are identical terms that add a standard charge to everyone’s bill.

Apparently this new structure will encourage water conservation and ensure that bills are more accurate. However, the new structure applies the same rate per unit to all users and replaces the declining block rate which gives a lower rate per unit of water for those using very large volumes of water. How does this encourage water conservation? If those who are using a large consumption of water have a lower rate per unit, how does that encourage one to use less water?

So where did all the money go from the rate increases last year? The rate increases last year did not provide better customer service or more accurate billing. The Legal Services Department at St. Ambrose regularly receives calls from city residents similarly complaining about high water bills which DPW is unable to justify. The informal water conference process in place to dispute such bills was a non-judicial process in which evidence was scarce and there was no right to appeal the hearing officer’s determination. This process routinely left homeowners stuck with high bills and without any further way to contest them.

There is clearly a drastic need to reform the DPW and the billing system beyond simply turning quarterly bills into monthly bills. As of now it is unclear how the rate increases are necessary for reform, or what the full scope of the reform will be. According to the Board of Estimates Agenda for July 27, 2016, DPW began testing the new system and started training their employees on its use. However, an employee from St. Ambrose Housing Aid Center recently spoke with individuals in the DPW billing department and customer service department. She asked various questions about the specifics of the new increases and no one could provide any information whatsoever in regards to the increases.

We at St. Ambrose Housing Aid Center hope the reforms bring improved accuracy in billing, a meaningful appeals process to contest erroneous billing, and clarity as to how the rate increases help achieve these ends. Our organization deals with water billing regularly, as we provide services for low to moderate income families with housing needs. Many of our clients will be greatly impacted by this massive increase in their water bill because they are already struggling financially. Last year we represented a client for his water bill hearing. He hoped to adjust his water bill because his water meter was replaced five times and still continued to provide faulty readings of his family’s consumption. In the end, with the help of St. Ambrose Housing Aid Center, the bill was reduced by over two hundred dollars which made a huge difference for our client and his family. However, not all residents are so lucky in challenging extremely high water bills. The city often refuses to adjust their bills leaving struggling homeowners in risk of tax sale.

St. Ambrose Housing Aid Center will always provide help or guidance to those struggling with their water bills, but we also provide housing counseling services, affordable rental housing, homesharing services, and legal services relating to housing. Not only will this rate increase affect low to moderate income families, but also the organizations that are trying to help these families secure stable, affordable housing. We understand that sometimes rate increases may be necessary, but the families who bear the burden of these increases deserve transparency and results.